What are the top 10 high-risk payment industries?
payment industries

High-risk payment industries are the ones that possess the risk of several chargebacks and frauds that the industry is vulnerable to. When you are in the high-risk industry, you have to keep your business team on toes so that there is a limited number of chargebacks and a strong team of technical support that manages and prevents frauds on your business platforms.

Even so, the business that records the chargeback of more than 1% is regarded as a high-risk payment industry. So, is your business among these? You will require a high-risk payment processing company gateway that deals with chargebacks in a professional and secured manner. Read on to find out:


Below is the list of the best ten high-risk payment industries today:

  1. Liquor/hard alcohol: Fraud is on the rise in this industry; that is why many companies like the Bank of America Merchant Account require processing fees to be paid through a credit card or any other payment processor. That is a legal drug. However, you should consume it only as prescribed by your doctor, and you should follow the instructions closely. Hard liquor could have many side effects, which might last for a very long time, so you should take it cautiously. Nowadays, you would not find any shipping company signing up for transactions with industries that include liquor and firearms or any other industries that have been listed as high-risk industries.
  2. Online gaming/gambling: The online gaming industryhas been a well-known, high-risk payment industry susceptible to security threats and chargeback issues. The main reason for this high-risk vulnerability in this sector is the underage players who play games on these platforms. In turn, it results in underage gambling, which could be a reason for serious legal trouble if the authorities find out. You have to find a high-risk payment processing company that offers robust security so that you and your customers have a safe experience.
  3. Online pharmacies: Online pharmacies have gained a high-risk payment status because of the illegal activities going on there. It is known to all that most websites selling medicines over the internet are not authorized by the medical authorities, and prescription drugs could pose serious health problems if taken without any instructions from a professional doctor. In addition, these medications are often manufactured in countries without proper quality control and could cause serious side effects. Other risk factors include the available drugs for misuse, which could result in addiction that might cause serious health problems. If you are a pharmaceutical business planning to take it online, you must have a trusted PSPdealing with high-risk payment processes.
  4. Marijuana/cannabis: That is a legalized drug in some countries, but possession of marijuana is considered illegal in many countries. However, if you are using it for medical purposes, it might be legal in some cases. The side effects of this drug include euphoria or feeling high, hallucinations, listlessness, or drowsiness. Other risk factors include increased heart rate and short-term memory loss. Now you know why this industry is included in the list of high-risk payment industries. A rule of thumb is: When it’s legally grey, it has a high-risk payment processingin terms of frauds, chargebacks, and general vulnerability.
  5. Firearms: Firearms is a high-risk business when it comes to online payments. This industry experiences many frauds and chargebacks compared to its sales turnover. The Firearms industry is on the top of the list with a record of more than 3% chargeback and frauds. The industry faces such a high number of fraudulent activities as they mainly deal in online sales. Their product shipment takes place across various continents to get chargebacks from different shipping addresses.
  6. The food industry: With an approximate chargeback percentage of 2.6%, the food industry takes the second spot on the list. This business usually deals in catering services and delivers food across different cities. They face chargebacks due to the financial constraints of some customers who have already made payments for their orders but cancel them later on, citing some other reason. The Food industry is again another sector with its share of fraudulent activities. Some people order food and later return an empty takeaway box or even half-eaten food. Such chargebacks disturb the company’s business reputation and result in a drop in sales volume, which is why there remains a spurt in false chargeback claims across this industry.
  7. Adult entertainment:The adult entertainment industry has always been high risk, and credit card sales form a significant percentage of total sales. Even so, adult entertainment businesses that use payment gateways such as CCBill to process their transactions run the risk of chargebacks and frauds. This is because instances are there where people buy membership on adult sites using stolen cards. The cardholder files a chargeback when this comes to light, refusing to pay for the product or service. The chargeback results in an automatic reversal of payment, thereby hurting the adult entertainment business financially.
  8. B2C E-commerce: That refers to business-to-consumer transactions where goods or services are sold over the internet. These include online retailers, ticket vendors, e-ticketing services, and travel websites. It has been noted that businesses considered high risk by credit card companies is usually e-commerce companies selling products to consumers. That is because e-commerce companies face the risk of chargebacks and fraudulent websites, which leads to huge losses. That’s not all; these businesses also suffer from overspending on transaction fees, gateway partnerships, and transaction costs.
  9. Tobacco/vape/e-cig: Since the past month, the industry has been leading to build an army against this. In other words, you can comment that the tobacco/vape/e-cig industry is unacceptable by most societies. It increases lawsuits and complaints from various quarters of people who have been affected by it. In the same way, this industry increases the potential for frauds and chargebacks from consumers who have been negatively affected by this tobacco industry. So if you’re a high-risk merchant accountholder in this particular industry, then better review your PSP and payment process to make it better, so you don’t have to go through all these hassles.
  10. Nutraceuticals: Nutraceuticals are the products that are touted to deliver nutritional or other benefits to human beings. Nutraceuticals deal in herbal products, dietary supplements, and homoeopathic medicines, all of which fall under the food product category. However, the main high-risk element of these industries is that they act as dietary supplement manufacturers who produce substandard goods by adding cheaper ingredients instead of premium ones.

The main high-risk element in the nutraceutical industry is that they are not permitted by law to make medical claims. As a result, consumers often believe that these products have curative powers, making them subject to FDA scrutiny. This industry is the one that has been facing several chargebacks from its customers. Also, this kind of business model has been very much at stake by the recent cyber-attacks and hacks via different payment platforms. Thus, it is no surprise that high-risk payments are a significant challenge for this industry.


If you are into any of the aforementioned businesses, you must be very careful when choosing your payment gateway, PSP. Now you know! The PSP is somewhat considered an insider of your business, so you must be very careful when choosing one since the incidence of fraud and chargebacks is very high.

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